You are here

France: Debate about Planned Tax Credit Reductions

In 2013, all indicators are flashing red! According to the sales statistics from Uniclima, the French union for the heating, cooling and ventilation industry, the newly installed collector area is expected to shrink to around 200,000 m² in 2013. All three major segments of the market declined. Uniclima estimates hot water systems for single-family houses (CESI in French) to have dropped by 21% and combi systems for single-family houses (SSC in French) to have shrunk by 15%. For the first time after 2010, the segment of multi-family houses with larger solar thermal systems (ESC in French) seems to have also reduced in volume by 13%. The situation was quite different over the last two years, when the decline in the single-family housing market was offset by a strong increase in the multi-family building segment.

Source: Enerplan for 2007 to 2011, Uniclima for 2012 and 2013

The decrease in the number of solar thermal systems installed in multi-family houses has been blamed on the implementation of the new thermal regulation Réglementation Thermique 2012 (RT 2012). The Housing Ministry offers a bonus of 7.5 kWh/m² and year (primary energy) until December 2014, so that the required average minimum energy standard of the buildings is up to 57.5 kWh/m²a. This bonus, however, makes it less likely for solar water heater systems to be installed in order to fulfil the standards, because highly efficient ventilation systems, heat pumps and better insulation can fulfil the minimum energy requirements just as well.

The 2014 forecast does not look any better: The Finance Bill 2014 draft - introduced in late September 2013 by the Council of Ministers - includes in Article 56 a reform of the tax credits for solar thermal systems. The share of the investment costs which can be deducted during the next tax declaration is thought to be reduced from 32% to 15% in 2014. It has not been clear yet when the Finance Bill 2014 will come into effect.

"Without support, the market won’t start growing again,” Gaël Parrens, Manager of installation company AquaSun, said at the conference on 11 October organised by energy agency ADEME. “The tax credits will be lower in all sectors," Martine Leclercq, Project Leader Renewable Heat at the General Directorate for Energy and Climate (DGEC), an entity of the Ministry for Ecology, Sustainable Development and Energy, MEDDE, said during the same meeting.

In a press release from 7 October 2013, the Union of Professionals in Solar Energy, Enerplan, called for the tax credits to stay at this year’s levels in 2014, in order to follow through with the recovery plan for the solar thermal sector discussed at the conference on 11 October. Enerplan recalled that “the French net export industry needs a strong domestic market to continue being successful.”